Long wait for Gunns investors

Ben Butler

UP TO 59,000 investors in wood-growing schemes run by failed timber company Gunns will have to wait two months before they learn whether administrators think value can be salvaged from the projects.

Following their appointment last week, administrator PPB had until yesterday to decide whether to disclaim leases over land on which non-viable tree projects sit. But last Thursday, the Victorian Supreme Court gave PPB until November 30 to scrutinise each of the 21 schemes and report to investors.

The task is made more complex because the trees owned by the investors are on land owned by 350 different landlords, including the Crown and Gunns itself. Receivers acting for an ANZ-led consortium of banks are likely to want control of the land unencumbered by the managed investment scheme structure.

While this may suit some MIS investors, who could be paid to give up their rights, it may not suit others who want to see the trees through to harvest, laying the groundwork for a potential legal stoush.

In addition, administrators have yet to determine the number of individual MIS investors. Although 59,000 are on the company's books, some may be listed more than once because they have invested in several schemes.

The administrators will also need to determine whether investors are creditors of the company, rather than just the scheme in which they invested. But they will allow MIS investors to attend and vote at a first creditors' meeting, on Wednesday in Launceston.

''As it is not possible to determine at this stage whether MIS investors will ultimately be creditors, the administrators will consider MIS investors as contingent creditors for the purposes of the meeting, so that MIS investors can attend and vote,'' the administrators said in a circular to creditors on Tuesday.